Appraisal Changes Coming

What's Actually Changing in the Appraisal Process

The appraisal industry is undergoing its most significant overhaul in decades. Federal regulators, the GSEs (Fannie Mae and Freddie Mac), and lenders are all pushing toward modernization — and that means changes to who conducts appraisals, how data is collected, and when a full in-person appraisal is even required.

The biggest shift is the expanded use of appraisal alternatives: desktop appraisals, hybrid appraisals, and automated valuation models (AVMs). These approaches rely on data, photos, and third-party property inspections rather than a licensed appraiser physically walking through the home. They're faster and cheaper — but they come with trade-offs that buyers and sellers need to understand.

At the same time, new bias and fairness standards are being implemented following years of documented disparities in how homes in certain neighborhoods — particularly communities of color — have been appraised. These changes are long overdue and will affect how comparables are selected and how neighborhood characteristics are described in appraisal reports.

Desktop and Hybrid Appraisals: Faster, But Know the Risks

A desktop appraisal is completed entirely from a desk — the appraiser never visits the property. They rely on MLS data, public records, photos, and floor plans. Fannie Mae and Freddie Mac now accept desktop appraisals for many conventional loan transactions, particularly refinances and lower-risk purchases.

A hybrid appraisal splits the work: a third-party inspector (not a licensed appraiser) visits the home to take photos and measurements, and a licensed appraiser completes the valuation remotely using that data. This is faster than a traditional appraisal and less expensive, but the appraiser never sees the property firsthand.

For sellers, this matters because unique features — a custom kitchen, a finished basement, a recently renovated primary suite — may not be captured accurately by a third-party inspector who isn't trained to assess value. If your home has significant upgrades, a full traditional appraisal may actually serve you better, and you may be able to request one.

For buyers, the risk is different: if an AVM or desktop appraisal misses a material defect that a traditional appraiser would have flagged, you may not find out until after closing. Your home inspection remains critical — don't let a streamlined appraisal process give you false confidence about the property's condition.

How the New Bias Standards Affect Valuations

The Appraisal Foundation and federal regulators have updated the Uniform Standards of Professional Appraisal Practice (USPAP) to address appraisal bias more directly. Appraisers are now required to use more objective language in reports, avoid references to neighborhood demographics, and document their comparable selection process more rigorously.

For buyers purchasing in historically undervalued neighborhoods — including some areas near military installations in San Antonio — this could mean more accurate valuations going forward. Homes that were previously appraised below their true market value due to implicit bias in comparable selection may now come in closer to what the market actually supports.

If you believe a recent appraisal was affected by bias, you have recourse. You can file a complaint with the state appraisal board, request a reconsideration of value (ROV) with supporting comparables, or ask your lender to order a second appraisal. These processes have been strengthened under the new standards.

What This Means for VA Loan Appraisals Specifically

VA appraisals operate under a separate system managed by the Department of Veterans Affairs — and they're not subject to the same Fannie/Freddie modernization push. VA appraisals are still conducted by VA-assigned fee appraisers who physically inspect the property, and they include a minimum property requirements (MPR) check that conventional appraisals don't.

This is actually a feature, not a bug. The VA's MPR standards ensure the home is safe, structurally sound, and sanitary — protecting the veteran buyer from purchasing a property with serious defects. The trade-off is that VA appraisals can take longer to schedule, particularly in high-demand markets like San Antonio where the VA appraiser pool is stretched.

The VA has been working to reduce appraisal turnaround times by expanding its fee appraiser roster and allowing more flexibility in scheduling. If you're using a VA loan, build extra time into your contract timeline — 10 to 14 business days for the appraisal is a reasonable buffer in most markets.

How to Prepare Your Home for Any Appraisal Type

Regardless of which appraisal method your transaction uses, preparation matters. Start by pulling recent comparable sales in your neighborhood — ideally within the last 90 days and within a half-mile radius. If your home has features that set it apart, document them: permits for additions, receipts for major upgrades, age of roof and HVAC systems.

For traditional and hybrid appraisals, make sure the home is accessible, clean, and well-lit on the day of the inspection. Address any obvious deferred maintenance — peeling paint, broken fixtures, missing handrails — before the appraiser arrives. These items can trigger required repairs that delay closing.

If you receive an appraisal that comes in below your contract price, don't panic. You have options: request a reconsideration of value with supporting data, renegotiate the purchase price with the seller, make up the difference in cash, or in some cases, walk away. An experienced agent can help you evaluate which path makes the most sense for your situation.

The Bottom Line for San Antonio and Omaha Buyers

Both San Antonio and Omaha are active markets where appraisal gaps — when a home appraises below the contract price — do happen, particularly when buyers are competing and pushing prices above recent comps. Understanding the appraisal process before you're in the middle of a transaction gives you a real advantage.

The modernization changes are generally positive: faster timelines, lower costs in some cases, and fairer outcomes for buyers in historically undervalued areas. But they also introduce new risks that require informed buyers and sellers. Working with an agent who understands the local market and the appraisal landscape is more important than ever.